Retirement and the Commercial Agents Regulations

Under the Commercial
Agents Regulations, an agent
is entitled to a termination
payment when their agency
is terminated by the principal.
In most cases, if the agent
terminates the agreement
himself, they will not be
entitled to this payment.

H o w e v e r , t h e r e a r e c e r t a i n
circumstances in which this principle
does not apply. According to the
regulations, an agent will still be eligible
for a termination payment if they end
the agency agreement due to their age,
infirmity or illness making it so that they
“cannot reasonably be required to
continue their activities”.
Although the regulations were not
specific on the issue, it had been
thought that an agent who decides to
terminate their agency agreement
p u r e l y t h r o u g h r e a c h i n g s t a t e
retirement age (and is fit enough to
continue working) would not be entitled
to a termination payment, as they could
still reasonably be required to continue
their duties.
However, when the issue was eventually
tested in court in November 2004, Judge
Mackie ruled that simply turning 65 was
sufficient for an agent to effectively
“cash in” their agency in return for a
termination payment.
Although considered by many to be
unfair, this decision means that
principals should be aware of the
potential liabilities that could be
involved in future with agents who are
approaching retirement age, and plan
for the future accordingly.

For more information on the Commercial
Agents Regulations, please visit:
www.ashbycohen.co.uk/commercial

Disclaimer: This column does not contain legal advice and is for general
guidance only. Agentbase, Ashby Cohen and the writer accept no
liability in connection with the general guidance given in this column.